richest merchants and manufacturers. They became at once, and have continued to be, the savings banks of the poor but industrious classes. The banks paid one per cent. below the current rate of interest for these deposits, and returned them on demand, or according to stipulation. These savings of the poor help largely to make up the vast sum of deposits which characterize the banks of Scotland. One result has been to give the benefits of these savings to the general customers of the banks, instead of their being invested in the public debt, or lent upon mortgage, as in England. No doubt this has contributed greatly to that progress in wealth and productive industry which has so much distinguished Scotland for more than a century. It had another good effect in begetting that care, caution and prudent management for which the banks of Scotland have so well founded a reputation." Another peculiar feature of the banking system of Scotland consists in the manner of giving cash credits. An applicant deposits approved securities with the bank and is allowed a standing credit on its books. He then draws checks for this amount and makes deposits in the ordinary way. An account is made up every six months, the rate of interest charged on loans being one per cent. more than that allowed on deposits. In commenting upon this feature of banking in Scotland, Colwell says: "In England, the bank which deals in promissory notes and bills of exchange, is dealing in paper which represents business transactions which are past; in Scotland, the bank opens credit for its customers, with reference to business which is to come. In Scotland, the banks give their customers a credit which helps their standing, and upon which they can draw for the purpose of payment, whenever there is need. The theory of the English banks is, that the currency must follow, and be controlled in quantity, by the

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business transactions which go before. The theory of the Scotch banks is, that these business transactions being all managed by men of business, who decide according to the exigencies of industry and trade what will promote their private interest, and meet the wants of the people, it must prove an important aid to men thus engaged to supply them, in advance of the progress of their business, with a credit upon which they can draw at pleasure. In England, they think this will lead to over-trading, by the stimulus it affords to so large a class of dealers: in Scotland, long experience has taught them that this English apprehension is wholly groundless. They know that the dealers who enjoy these cash credits are so immediately brought under the supervision of the banks, and their own sureties, that they are, perhaps, the most prudent and safe men of business in the world. * * There is a prevalent idea among statesmen and writers upon money, that there should be a broad basis of money or gold coin, under and as a support to the paper circulation; * that a paper currency, to be perfect, should fluctuate as a gold currency would do, if it were the sole medium of payment. To the mind of a Scotch banker, a greater absurdity could not be presented in as many words. He would say: 'What! when a demand springs up for gold, in consequence of some foreign war, must we so regulate the issues of our banks, as to reduce the currency of notes in the same proportion that the currency of gold is carried off! Rather should we increase our issues, and supply the place of the currency that is exported. They know that bank notes can fully discharge the functions of money, for they see it every day; and not only so, but they are certain that almost no business of Scotland is carried on by means of a currency of gold. The Scottish people can never be made to comprehend why

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their bank notes, bank deposits, and cash credits, should fluctuate in amount as gold would fluctuate, if exclusively employed. These forms of currency do not come of gold; they are not founded upon it, and they have nothing to do with it. In Scotland they understand, as well as they do in England, the use of gold as money; they know its value as a commodity, but being a costly commodity, they do not incline to employ it as a currency, except so far as their bank currency fails of its object; nor do they wish to purchase or hold it as a commodity, except for such special purpose as may promise adequate advantage. Their system of banking enables them to dispense with it almost entirely. In this, they are far from thinking themselves behind their neighbors, in intelligence or financial skill." The banks of Scotland issue bank notes as low as £1, and the people of Scotland are always amply supplied with a medium of exchange.

THE FRENCH SYSTEM OF FINANCE.

France enjoys a financial system superior to that of any other nation. The fiscal affairs of the government are conducted by a central administration, or Ministry of Finance, and eighty-six branches located in different districts. All transactions between the government and the people are carried on in the forms and methods of the treasury department, without the intervention of banks. The government has no connection with the Bank of France, but deals with it as it does with individuals, except that its notes are made a legal tender whenever the scarcity of specie renders such a step necessary. The treasury department of France in many respects takes the place of banks. It is regarded as a duty by the French government to afford the people all the facilities in the way of domestic exchange that banks could

give, instead of allowing it to be furnished exclusively by the banks.

In each district there is a receiver general, in whose office the revenues of the district are paid. When once paid in they are subject to the order of the central administration alone, and abundant precautions exist to insure strict accountability and integrity. The treasury is managed with special reference to the wants and requirements of the public. The manner in which its operations in this respect are conducted is thus set forth by Colwell: "Among its numerous officials, is one in direct relations with the chief minister of finance, who has special charge of the locality of all money in the treasury. He can neither receive nor pay money; but he can transfer the public money from one office of the treasury to another, and place it wherever the exigencies of the government may require. It is in the office of this functionary that is established a direct and very important connection with the current business of the day. His duty requires of him a careful and timely study of the points of public expenditure; he must know not only where the money will be wanted, but he must have it ready when required. To accomplish this important object, it becomes his duty to study the domestic trade of the country, that he may avail himself of the internal exchanges in the necessary distribution of money in the treasury. It is very rare, indeed, that the French treasury ever shifts the locality of gold or silver. It may require many circuitous transfers to move the excess of revenue, in some departments, to the points of expeniture, and to supply the deficiency in other departments. To make these transfers, the officer who has special charge of that duty relies almost wholly on the domestic exchanges. He is well informed where funds are wanted for the purposes of industry or trade; he learns

where and when those who reside in the vicinity of each office of the treasury desire to remit funds; and he learns whence and when they wish to draw them. His office becomes the depository of this information, because he intervenes in this business of giving drafts upon the treasury, payable at other points, and giving money at his own office for money received at other offices. His intervention in the transmission of funds assists in balancing the internal exchanges of the country; for, of course, the office is only applied to when the business of individuals requires such accommodation. But this business is not confined to receiving money at an office of the treasury in one place, and paying the amount as may be required at another office, in a different place; that is, to a mere exchange of money between the treasury and individuals at different places; it goes much further. At times and places where large transfers of funds become necessary, the proper officer of the treasury becomes the receiver of commercial or individual paper to a large amount."

"The receivers-general of the eighty-six departments, and their subordinates, the receivers of the treasuries of the arrondissments and communes, maintain reciprocal business relations by frequent exchanges of money, by drafts upon. each other, and by bills upon Paris and other places. The chief officers of the treasury become, by the constant report of this business to them, intimately acquainted with the whole industrial and commercial movement of the population. They regard it as extremely important to these interests, that the money which is necessarily withdrawn from private uses for public purposes, should be retained in the treasury as short a time as possible. Out of 300,000,000 or 400,000,000 of francs annually remitted from the country treasuries to Paris, not more than ten per cent., or 30,000,000